istithmar

W Union Square Saved From Second Foreclosure Sale

A few months ago Dubai-based Istithmar lost control of the W New York Union Square hotel during a foreclosure auction. One of the property's lenders LEM Mezzanine was named the winning bidder for just $2 million but taking on $212 million in debt. Now the entity formed by LEM Mezzanine, Hotels Union Square Mezz 1 LLC, has filed for bankruptcy to avoid a second foreclosure auction.

DekaBank Deutsche Girozentrale, which held a $60 million loan on the property, was planning to foreclose on the property on Wednesday. Crains reports that Hotels Union Square Mezz 1 reported debts of between $100 million and $501 million. A spokesperson for LEM said that the company is still working on restructuring the hotel's debt. The 20-story hotel, which opened in 2000 was bought by Istithmar in 2006 for $285 million.The hotel remains open for business and is currently offering a special of rates from $289 per night for arrivals Thursday - Saturday.

Tags: hotel foreclosure, hotel foreclosures, hotels in trouble, istithmar, Istithmar World, new york, union square, w hotel

Dubai-Based Fund Loses W Union Square Hotel

by Deidre Woollard (RSS feed) —

Filed under: Luxury Travel & Hotels

The fallout from the Dubai cash crunch seems to have begun. Dubai-based Istithmar lost control of the W New York Union Square hotel during a foreclosure auction on Tuesday. The Real Deal reports that one of the property's lenders LEM Mezzanine, a private equity fund holding a junior portion of the mezzanine debt bid $2 million for the debt on the hotel which Istithmar bought in 2006 for $285 million. Istithmar had also submitted a bid of $2.1 million but they had asked for certain loan changes and so LEM was named the winning bidder taking on $212 million in debt. The hotel will continue on as usual and LEM is banking on an eventual upturn in the tourism market.

What will Istithmar unload next? Two potential targets seem to be Barney's New York which has been rumored to be for sale for a long time. The problem is that no one is willing for pay what Istithmar paid for it ($942 million in 2007) especially at a time when department stores have been going through a deep and painful purge. This year's holiday season could be key for the department store brand. Another target could be the Queen Elizabeth 2, the luxury liner which is supposed to become a floating hotel. Istithmar also owns shares in Yacht Haven Grande, a mega-marina and resort complex in the U.S. Virgin Islands.

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Tags: dubai, istithmar, istithmar world, IstithmarWorld, new york city, NewYorkCity, union square, UnionSquare, w hotel, WHotel

What Will Become Of Dubai's Istithmar World?

by Deidre Woollard (RSS feed) —

Filed under: Wealth

The sudden fall of Istithmar World, is one of the shadowiest and most interesting stories going on right now. Bloomberg reports that the Dubai sovereign wealth fund, is halting investments as part of a restructuring effort. The fund has been on one crazy decade-long spending spree of more than $25 billion that include shares in Yacht Haven Grande in the Virgin Islands, Barneys New York, the W Hotel Union Square in New York City and the Queen Elizabeth 2 yacht.

But as Dubai's fortunes have undergone a major shift in the past year or two the load of all those investments has become particularly onerous. One major burden is the CityCenter project in Las Vegas which Istithmar shares with MGM Mirage. Isithmar may end up selling the fund or some of its assets. Some say the fund will cease to exist which could put some of its investments in danger. Rumors of a sale of the Queen Elizabeth 2 and of a possible bankruptcy filing for Barneys have been swirling for weeks. For the most part Dubai tries to keep its financial flailings out of the public eye but that may not be possible this time.

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Tags: citycenter, dubai, istithmar